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Technology Stocks : Interdigital Communication(IDCC) -- Ignore unavailable to you. Want to Upgrade?

To: Jon K. who wrote (2715)	8/3/1999 1:48:00 AM
From: Daniel Joo	Respond to of 5195

Jon, the reasons have been written about extensively at www.ragingbull.com - I'd go there to find out more - some excellent posts by mickeybritt, carpgold among others. I was concerned about the withdrawals, but the Nokia deal alleviated much of the concern. Dan

To: Jon K. who wrote (2715)	8/3/1999 10:18:00 PM
From: Bill Dalglish	Read Replies (4) \| Respond to of 5195

Jon, re: Siemens, Alcatel, IDC and Nokia Re: "Do you know why Siemens and Alcatel withdrew from B-CDMA?" Your great question deserves as full a response as I can, Jon. You probably know most of this already, but in case someone reading here doesn't, I'll fill in some of the details as I try to explain what I think happened and why: From 1994 until recently, InterDigital's alliance partners, Siemens, Alcatel and Samsung, contributed both cash and engineering talent toward InterDigital's efforts to develop a revolutionary telecommunications technology utilizing wideband CDMA to enable the communication of not only voice, but huge chunks of data (as would be required for Internet use) in a "fixed location" wireless environment. Realizing that the technology it was developing could be used for both "mobile" (as in cell phone) and fixed wireless, InterDigital focused until recently on fixed wireless systems, which was the major interest of its alliance partners Siemens, Alcatel and Samsung. In late 1998 and early 1999, both InterDigital and its alliance partners began to realize that the technology being developed (and patented exclusively by InterDigital) was quickly leading to a technological breakthrough that would allow mobile wireless to leap right over fixed wireless. That is, InterDigital (and the few others working in this highly specialized area) would soon be able to provide the technology that would allow telephone service to be completely mobile at basically the same cost as service that was limited to a fixed location. This means that in the foreseeable future, it will be just as inexpensive to install a new telephone "line" that one can carry along wherever one travels (local or long distances) as to install a "line" that is limited to use at a certain location ("fixed"). Already in Finland, many businesses and residences don't bother to install wired telephones at all, they now use mobile telephones both at a fixed location at home and in the office as well as on the move. In 1998, Nokia, the Finnish corporation that is now the world's largest manufacturer of cell phones, became aware of InterDigital's patented breakthrough technology (developed with the help of Siemens, Alcatel and Samsung). Nokia contracted with InterDigital ($40 mil) to develop for Nokia new cell phones and other wireless devices capable of transmitting huge amounts of data. Almost immediately after the Nokia agreement, Siemens announced a reorganization plan for its worldwide corporation. It said that it would no longer be supporting InterDigital's development of fixed wireless products. In April, 1999, Alcatel also decided to no longer contribute toward InterDigital's efforts to develop wideband fixed wireless products for Alcatel's use. As of June, 1999, Samsung has not made any announcement on the matter. As would be expected, the stock market reacted positively to the announcement of the Nokia-InterDigital arrangement but negatively to the Seimens- Alcatel - InterDigital breakup, the latter of which introduced some uncertainty about InterDigital's future. InterDigital shareholders have differing perspectives on the new Nokia - InterDigital partnership and especially on the subsequent dissolution of the Siemens and Alcatel alliances with IDC. I agree with the shareholders who believe that the breakup of the Seimens - Alcatel - InterDigital alliance (which might also signal a breakup with Samsung at some future date) was inevitable once Seimens and Alcatel realized that Their potential fixed location wireless markets would likely not support the extensive research and development costs associated with their alliances with InterDigital. Further, the very technology Seimens and Alcatel had helped IDC develop could - especially with the new InterDigital -- Nokia partnership leapfrog over their own fixed wireless telecommunications products. One could hardly expect Siemens and Alcatel to continue to contribute cash and engineering time to a cause that could lessen, rather than strengthen, their respective positions in the telecommunications industry. Many shareholders are sensing that InterDigital appears to be the winner in all this, giving up its stake in fixed location wireless in order to enhance its position as one of the leading developers of mobile wireless technology (which technology appears to have a far brighter future than fixed wireless). The stock market as a whole has not reflected this optimism, but many InterDigital shareholders believe that "The Street" will eventually respond favorably when it understands what has actually transpired Although there is no longer an alliance in which Seimens and Alcatel contribute to the development of InterDigital's proprietary wideband CDMA technology (B-CDMA™, , there still may be some future cooperative venture. For example, if MCI WorldCom uses fixed location wireless local loop (WLL) as part of its planned major expansion, Samsung, Siemens or Alcatel would be logical suppliers of B-CDMA™ equipment to MCI WorldCom. IDC may have an inside track in this potentially lucrative new market. An MCI WorldCom subsidiary, Pioneer, in Iowa, has been testing IDC's new wideband fixed location WLL technology. The reported results have been excellent. Thanks for posting,Jon! Bill